KAP REACHES 2023 ADJUSTED GUIDANCE FORECAST AND PROJECTS SIGNIFICANTLY
RISING EBITDA

EQS-News: KAP AG / Key word(s): Annual Report
KAP REACHES 2023 ADJUSTED GUIDANCE FORECAST AND PROJECTS SIGNIFICANTLY
RISING EBITDA

26.04.2024 / 08:00 CET/CEST
The issuer is solely responsible for the content of this announcement.

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KAP REACHES 2023 ADJUSTED GUIDANCE FORECAST AND PROJECTS SIGNIFICANTLY
RISING EBITDA

  * Revenue of EUR316.7 million and normalised EBITDA of EUR15.6 million
    (adjusted for the companies sold in April 2023)

  * Negative factors include supply chain issues and negative macroeconomic
    developments in the construction sector and the automotive sector

* Structural measures are starting to produce first noticeable results

  * Guidance forecast for 2024: moderate increase in revenue, significant
    increase in normalised EBITDA

Fulda, 26 April 2024 - KAP AG ('KAP'), a listed, medium-sized industrial
holding company, reached in the 2023 financial year its guidance forecast as
adjusted in August in a difficult macroeconomic environment. While the
Company is still not satisfied with the figures achieved, it is already
seeing a positive trend reversal on individual core markets.

Overall, the still weak global economy, negative exceptional economic
developments in key target markets such as the construction sector or the
automotive industry as well as supply chain issues weighed on the Company in
2023. On a comparable basis - that is without the subsection of the flexible
films segment sold in April 2023 - KAP generated revenue of EUR316.7 million
in the 2023 financial year, down 12.1% (previous year: EUR360.1 million).
Including the subsection sold, revenue amounted to EUR337.0 million, down
22.3% on 2022.

Normalised EBITDA came to EUR15.6 million (previous year: EUR23.5 million) and
the respective margin was 4.9% (previous year: 6.5%) at the end of 2023,
without the subsection of the flexible films segment sold in the reporting
period. Including the subsection sold, normalised EBITDA was at EUR17.3
million, which represents a substantial decrease on the previous-year figure
of EUR35.9 million. The normalised EBITDA margin came to 5.1% after 8.3% in
the previous year. The consolidated loss after taxes totalled EUR-0.1 million,
up on the previous-year figure of EUR-1.7 million.

In the reporting year, net normalisation adjustments totalled EUR-41.2 million
(previous year: EUR-7.6 million). Non-recurring expenses and income of EUR-42.6
million thereof were attributable exclusively to the sale of a subsection of
the flexible films segment. Without considering these special and
non-recurring effects, EBITDA increased by 34.5% to EUR58.5 million (previous
year: EUR43.5 million).

Marten Julius, Spokesman of the Management Board of KAP AG: 'It's true that
2023 was impacted by many negative economic factors that we were unable to
influence, or only to a very limited extent. Nevertheless, we cannot be
satisfied with the result, which is why we have already initiated the
necessary steps to make the KAP Group and its segments leaner, more
efficient and responsive. But, that aside, we can already see the
environment slowly recovering and demand for our products rising again on
markets that are important to us, such as for pool liners for instance.'

Segments exhibit varied developments
The flexible films segment recorded 24.8% lower revenue in 2023 than in the
previous year on a comparable basis, that is without the subsection sold.
Including the subsection sold, revenue amounted to EUR98.3 million, down
approximately 44.5% year on year (previous year: EUR177.1 million). In the
reporting period, this segment was negatively affected by the end of the
pandemic-related economic buoyancy due to the cocooning effect - many
dealers had bought products, particularly pool liners, in the previous year
but were unable to sell off the high level stockpiled at the anticipated
rate in the reporting period. Added to this was a noticeable downturn in the
construction sector. Having said that, the first signs of a trend reversal
and of demand starting to rise again were already becoming apparent at the
end of 2023. On a comparable basis, normalised EBITDA decreased, in line
with revenue, from EUR10.3 million to EUR8.1 million and the normalised EBITDA
margin increased by 0.5 percentage points from 9.9% to 10.4%. Including the
subsection sold, normalised EBITDA slid from EUR22.4 million down to EUR9.8
million. The normalised EBITDA margin narrowed by 2.6 percentage points to
10.0% (previous year: 12.6%).

In the engineered products segment, both revenue and normalised EBITDA fell
significantly. Revenue decreased from EUR145.7 million in 2022 to EUR116.7
million and normalised EBITDA decreased from EUR9.2 million to EUR3.1 million.
This is equivalent to a normalised EBITDA margin of 2.7% after 6.3% in the
previous year. The decrease in the EBITDA margin is mainly attributable to
the considerably lower level of revenue and the time lag in adjusting costs.
Global economic developments, particularly in the automotive sector,
additionally weighed on the second half of the year in particular. Added to
this, a larger, high-margin customer contract had expired at the end of the
previous year. In response to this development, extensive structural
measures to make production leaner and more efficient and achieve a
noticeable reduction in administrative functions at the headquarters in
Fulda have already been implemented. In addition, comprehensive initiatives
have been launched with the aim of optimising working capital management and
the product portfolio.

The surface technologies segment increased its revenue in 2023 to EUR68.6
million, up 5.1% on 2022 (previous year: EUR65.3 million). Normalised EBITDA
totalled EUR6.1 million at year-end (previous year: EUR6.8 million). The
normalised EBITDA margin came to 8.9% in 2023 (previous year: 10.4%). This
segment was able to pass on to the market only part of the rise in energy
costs. As in the precision components segment, the weak global economy in
the automotive sector also made itself felt here.

The precision components segment generated revenue of EUR53.4 million in the
reporting period, up 17.1% year on year (previous year: EUR45.6 million). This
positive performance was due in particular to the increased ability to pass
on the rise in energy and raw materials costs to the segment's customers as
well as higher unit sales. Normalised EBITDA amounted to EUR2.1 million, which
marks an improvement on the previous-year figure of EUR-0.1 million. The
normalised EBITDA margin came to 3.9% in 2023 (previous year: -0.2%).

Measures to enhance efficiency
Primarily, but not only, in the engineered products segment, extensive
structural measures were taken in 2023 to make administration, production
and sales leaner, more efficient and responsive. Some of the related
expenses were already normalised in 2023, and the measures taken are
starting to produce the first noticeable results and improvements. We
therefore believe that the KAP Group is in a good position. However, we
regularly review any need for further optimisation measures in order to
benefit from megatrends in niche markets in the long term.

Outlook
Considering the KAP Group's diversified investment model and its good market
position in profitable niche markets with a focus on long-term megatrends
and the structural measures already initiated, the Management Board expects
revenue in the Group to increase moderately and normalised EBITDA to
increase significantly in the current financial year compared with the
previous year. Accordingly, the projections for all segments anticipate
stable or slightly increasing revenue and a significant increase in
normalised EBITDA year on year. Only the engineered products segment is
expected to see revenue decline slightly as a result of portfolio
optimisations undertaken in certain regions.

The complete audited Annual Report 2023, including the independent auditors'
report, is available on KAP AG's website.

Contact:
KAP AG
Kai Knitter
Head of Investor Relations & Corporate Communications
investorrelations@kap.de
+49 661 103 327


About KAP AG
KAP AG is a listed industrial holding company focused on upper mid-size
operating companies that seizes attractive growth opportunities in their
respective niche markets. Specifically, KAP AG currently focuses on four
distinct operating segments: engineered products, flexible films, surface
technologies and precision components. The Group lets its shareholders
participate in the long-term sustainable value development through an
attractive dividend. KAP AG currently has over 2,400 employees at 24
locations in eleven countries. KAP AG is a Participant of the United Nations
Global Compact and adheres to its principles-based approach to responsible
business. KAP AG's shares are listed on the Regulated Market of the
Frankfurt Stock Exchange (General Standard, ISIN DE0006208408).


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   Language:       English
   Company:        KAP AG
                   Edelzeller Straße 44
                   36043 Fulda
                   Germany
   Phone:          06611030
   Fax:            0661103830
   E-mail:         office@kap.de
   Internet:       www.kap.de
   ISIN:           DE0006208408
   WKN:            620840
   Listed:         Regulated Market in Frankfurt (General Standard);
                   Regulated Unofficial Market in Berlin, Dusseldorf,
                   Munich, Stuttgart, Tradegate Exchange
   EQS News ID:    1889647

End of News EQS News Service
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1889647 26.04.2024 CET/CEST